LatAm spreads widen in risk-off session

NEW YORK, May 26 (IFR) - Latin American credits were ending
the day wider in spread terms on Tuesday as tumbling stocks and
weaker commodity prices weighed on sentiment.

With US equity markets blinking red today, investors were
largely in risk-off mode in Latin America, making for a quiet
session in the secondary and primary markets following the long
Memorial Day weekend in the US.

"Investors have cash, but this isn't a market you go out in
and buy credits at tight valuations," said a banker. "If you
feel that markets could drop from a rate hike, it feels
expensive."

A rallying dollar may have brought some support to the US
Treasury market, which saw yields on the 10-year fall back to
around 2.13%, but it also left commodities on the back foot and
dampened sentiment toward the region.

Oil was particularly hard hit with Brent and US crude
slipping a good 3%, further pressured by expectations of
increased supply.

Bonds issued by Pacific Rubiales continue to suffer price
swings following a bounce last week on news that Mexican
conglomerate Alfa and Harbour Energy would acquire the embattled
oil company.

The company's 5.625% 2025s were back down at 83.00-84.00
Tuesday after hitting 86.00 last Thursday on the acquisition
announcement amid good two-way flow.

Investors are in two minds whether to reduce exposure to a
credit that has taken a beating this year, or hold it for
further upside once Alfa takes over the company.
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